What is Cryptocurrency? A Step By Step Guide

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What is Cryptocurrency

If you want to know what is Cryptocurrency? How you can get it and how does it’s work? Then this step-by-step guide can help you to understand. Uses this straightforward cryptocurrency guide to learn what is digital currency? It will also explain to you simply how the system works, how you can get profit, which crypto scams should avoid. By the end of this guide, you will be able to answer what is cryptocurrency?

What is Digital currency in a nutshell?

A short and easy answer is cryptocurrency digital money or digital cash system. The currency is associate with the internet that uses cryptography. It`s a digital or virtual currency design to work as a medium of exchange fees securely.

Generally, it uses cryptography to secure and verify the crypto transaction. Basically, no one can change this blockchain database if the specific requirement is fulfilled for limited entries.

Few people know crypto that is a side product invention on the internet as digital gold. The unknown inventor of BitCoin Satoshi Nakamoto first time invented it as the first cryptocurrency in 2008. This is an electrolytic decentralized cash system so call peer to peer transactions and it has no physical form.

Its supply is not determined by any authority and its network is not controlled by any central bank. Bitcoin, Ethereum, Litecoin, Rippel, as are the example of digital currency.

The transaction is put into a block and the network high-class computer solving complex mathematical problems. When the computer solves it, another network can check it. When all the networks is agreeing to solve it then the block is added to the blockchain and the transaction is completed.

Cryptocurrency vs. Banks

The cryptocurrency transaction can destroy the traditional banking system. Because for digital transactions no need any third party or intermediary authority. Now the bank is interested in cryptocurrency and they are interested in what can do for the bank with blockchain. But cryptocurrency basically Bitcoin expressly created to avoid the banking, trading transaction system.

Crypto lovers and the developer have got an idea of a decentralized network, where no need for third parties to process the transaction. Also, no need for any bank or centralized network where need to go physically to complete the transaction. The passion is to make a free transaction process. It`s saved time, fees, safety, and security.

The History of Cryptocurrency

Before the invention of cryptocurrency, there were a few attempts to create something similar to Bitcoin. But they wear fail to get popularity. Both of them “B-money” and “BitGold” are corrupted with mathematical problems hashing in the blockchain. Nick Szabo, involve with decentralization and wrote “BitGold”.

histori of crypto
History of Cryptocurrency

The first and foremost cryptocurrency is Bitcoin and the story began in 2009. Perhaps, ‘Satoshi Nakamoto’ created and released Bitcoin. ‘Nakamoto’ true identity is unknown, many say it is a person another hand, some believe this is a group. Anyway, Bitcoin software was public in the same year in 2009 to allow people to mine and creating the first blockchains.

How to Mine Cryptocurrency

Basically, some cryptocurrencies create through a Mining process. You must attempt to solve a hash to mine this crypto and which allows you to the next block. After difficult mathematical solvency new block is added to the main blockchain. Finally, this transaction is recorded in the Blockchain to see for all.

Worldwide people are competing to be the first to solve a hash. Those (Miners) who solving the hash receive a block reward – or an amount of mining cryptocurrency. Hopefully, you have already got an idea about what is Cryptocurrency also want to know about mining.

Mine Cryptocurrency
Cryptocurrency Mining

Requirements you need to mining cryptocurrency

You know, unlike mining for gold, there need tools a pan, and a magnifying glass. To get started here with basic you need those.

  • Mining hardware. Firstly, an ASIC chip needs in your computer to mine cryptocurrency. 1. Dragonmint 16T 2. Antminer S7
  • Mining software. Try to get free software to explain how this software works for ASIC.1.BFGMiner 2. GUIMiner
  • Bitcoin wallet. If you complete a block, you can transfer it to your crypto wallet. 1. Coinbase 2. Blockchain

What is Cryptocurrency Wallet?

A cryptocurrency wallet is a secure wallet where you can send, receive and store your digital currency like Bitcoin, Ethereum, and Litecoin. Basically, most of the coins have their official wallets. Some of them recommended using third parties wallets. To use any digital currency you will need a wallet.

Cryptocurrency wallet is like a leather wallet many of us still use in our real life to carry cash. But leather wallets missing some features. For example, a digital wallet can hold hundred of currency in one place. Essay way to keep track of when, how, and where you spend money. You can make a short note of every transaction.

On the other have a physical wallet or leather wallet have the limitation. In short, we can say top cryptocurrency wallets are much smarter than physical leather wallets.

What is Cryptocurrency & What can you do with it?

With digital currency, you can send, receive payments. You can trade and store your money to make profits. To buy goods and products use your crypto wallets worldwide.

The transaction cost is very low moreover, you can buy anything, any time and any part of the world. A number of retailers and business companies are accepting digital currency. So, accept as payment for your business worldwide.

How to Invest in Cryptocurrency

Investing in the cryptocurrency market is highly risky and at the same time, it is highly rewarded. It depends on how and when you started to invest in this crypto space. In February 2017 Bitcoin price was $1000 and in 2018 it was $19000 and now it`s August 21, 2018, the BTC price is $6300. You could make a ton of money if you invest earlier.

There has been a lot of old-coin where the price picks on the top at the end of 2017. But now it is on the bottom level. Bitcoin age is 9 years old and Etherium old is 2 years old, so it is a promising stage.

Perhaps the best way to invest in cryptocurrency Buy low and sell high. But, here I am interested to change the way about cryptocurrency investment policy.

So what is the safest way to invest in Cryptocurrency? You can see the stock market is so bubbles, market crashes, and economic recovery. The recent crypto market crashes should everyone learn a lesson from it.

  • Go through long time investment. It minimizes the risk.
  • Since you investing over time see the market trend.
  • Stay updated with all the crypto tools and news sites.
  • Before invest in crypto ask yourself  “What am I trying to achieve?”
  • You should learn a little bit more about What is Cryptocurrency.

Why should you use cryptocurrency?

Low transaction fees: Bank transaction is high fees and through the blockchain transaction is low.

Ownership: Yes! It`s your own bank. You can send money to anyone, anytime and anywhere.

Identity protection: If you want to send and receive money privet then it`s the ideal way to do that.

Risk-free for sellers: No risk for sellers because you can send or get money with the safest way.

First and secure: Very first transaction such as you can send million dollars within short time worldwide.

Legality of cryptocurrencies

About the legality of cryptocurrency, each country has a different standers policy. Most of the digital currency is not backed by any central authorities. Most of the country does have not have much awareness about Cryptocurrency.

Global regulators: Legal tender depends on the country’s basis. Different countries have different views on digital currency.

Policy on Exchanges: At the G-20 meeting Argentina’s Central bank governor ”specific recommendation on what to do” and said about task force submitted proposals by July. Italy’s central bank leader told about to pose risk about cryptocurrency and should not be banned.

A global watchdog runs to G-20 regulation and cautions some countries crackdown economy. Another hand FSB’s have a positive view of digital currency.

Legality of cryptocurrencies
Cryptocurrencies Legality

The International Monetary Fund has likewise called for more participation. IMF Managing Director Christine Lagarde featured digital money’s potential as a vehicle for illegal tax avoidance and the financing of fear-based oppression.

What is Cryptocurrency in different countries

  1. Japan: Legal tender as of last April 2018.
  2. United States: Not legal tender, according to Financial Crimes Enforcement Network.
  3. European Union: No EU member state can introduce its own currency, according to European Central Bank President Mario Draghi.
  4. United Kingdom: Not legal tender. “Only sterling is legal tender in the UK,” according to Carney.
  5. South Korea: Not legal tender.
  6. China: Not legal tender.
  7. Singapore: Not legal tender.
  8. India: Not legal tender, reportedly taking steps to outlaw it.
  9. Switzerland: View on bitcoin- Legal.
  10. Bangladesh: Not legal tender.

Most common cryptocurrencies

  • Bitcoin: This is the most used cryptocurrency world and dominates 50% of the market capitalization as per coinmarketcap. There are almost 16.9 million are mine and total circulation is 21 million. Bitcoin market capital hit a record high of more than $200bn in 2018.
  • Bitcoin cash: Bitcoin cash fork by the original Bitcoin in the summer of 2017. As a split of Bitcoin it shares is the same as Bitcoin.
  • Litecoin: It’s called Bitcoin brother and is popular a peer-to-peer cryptocurrency.
  • Dogecoin: It’s really funny but this coin is widely used and pretty much popular. Initially introduced as a parody currency with its own community.
  • Ripel XRP: This cryptocurrency is a program design for a centralized transaction network for bank money transactions like SWIFT.
  • Stellar (XLM): It was launched by Jed McCaleb in 2014 who was Repel co-founder.
  • NEO: It is the first and popular China public blockchain. Initially NEO lunch in 2014.
  • IOTA: Among these most 10 cryptocurrencies IOTA is unique in a new protocol called ‘Tangle’ rather than blockchain technology.
  • EOS: It is another direct competitor with NEO and Etherium.
  • Moreno: It is more advance than Z-Cash. It’s can hide any traces of transactions.

How to store Cryptocurrency

There have a cold wallet and hot wallet. A cryptocurrency wallet can allow a crypto holder “become their own bank”. For a long time investment, you can store your coin in the cold store. For security practices, you will get satisfaction with your cold storage wallet as the safest place. What is Cryptocurrency when you come with this question you know much more?

Hot store wallet can be used basically instantaneously to send, receive and trade with the exchange. A crypto holder uses a private key to access their wallet. They can also use QR codes. This post makes you knowledgeable about cryptocurrency.

How to Buy Cryptocurrency

If you are interested to invest in cryptocurrency then there have different available options to buy it. You can buy through different cryptocurrencies with USD, EUR, and GBP.

You can also buy crypto with your credit card from any part of the world. So, hopefully this What is Cryptocurrency guide help you.

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